Anton Dzhuplin

The ALRUD team advised the buyer in a transaction to acquire a controlling stake in Kaluga Turbine Works Public Joint-Stock Company. Kaluga Turbine Works is a power engineering company that specializes in the production of steam turbines and turbogenerators. It is one of the largest manufacturers of power industry equipment in Russia. The ALRUD team provided comprehensive legal support to the buyer during all stages of the transaction. This support included due diligence, the structuring of the transaction, negotiations, the drafting of legally binding documentation, support in closing the transaction, as well as consultations on regulatory issues and securities market legislation. ALRUD has now assisted with multiple transactions on the Russian turbine manufacturer market. The ALRUD team also previously provided support for the buyer in a transaction to acquire another turbine manufacturer – Ural Turbine Works. The ALRUD team that worked on the project under the guidance of Corporate/M&A Practice Partner [Anton Dzhuplin](https://www.alrud.com/people/AntonDzhuplin/ 'Anton Dzhuplin') included experts from the Corporate and M&A, Competition/Antitrust, Real Estate, and Capital & Equity Markets practices: Associate [Yuriy Nakul](https://www.alrud.com/people/YuriyNakul/ 'Yuriy Nakul'), Senior Associates [Ailana Goldina](https://www.alrud.com/people/AilanaGoldina/ 'Ailana Goldina'), [Boris Pribylov](https://www.alrud.com/people/BorisPribylov/ 'Boris Pribylov') and [Daniil Lozovsky](https://www.alrud.com/people/DaniilLozovsky/ 'Daniil Lozovsky'), Associate [Sabina Idrisova](https://www.alrud.com/people/IdrisovaSabina/ 'Sabina Idrisova') and Junior Associates Maria Davydova and Alisa Belova.

ALRUD represented the interests of the seller, a Russian market leader in production of decorative high-pressure laminate (HPL) and development of based on it complete interior solutions, within the sale of Zavod Sloistyh Plastikov to the investment holding company R-Investicii established by a former head of Concern “Rossium”, member of the board of the directors of its subsidiary companies (including MKB and Ingrad), Andrey Kryukov. Sloplast products are used for interior and exterior finish of buildings and premises, ventilated facade systems, interior finish of ground, water and rail transport and for other interior and exterior finish solutions. Over its entire history the company has implemented over 1 000 projects, including Innopolis in Kazan, stadium in Krasnodar and Expoforum in Saint-Petersburg. In 2023 it manufactured more than 3 million square meters of HPL plastic. ALRUD team has provided comprehensive legal support to the seller including structuring of the deal in terms of corporate and tax issues, drafting of legally binding documents, closing and settlements. Advance Capital performed as a financial adviser on the deal. ALRUD team working on the project was headed by [Anton Dzhuplin](https://www.alrud.com/people/AntonDzhuplin/ 'Anton Dzhuplin'), Partner of the Corporate and M&A Practice, and included Senior Associates [Kristina Akalovich](https://www.alrud.com/people/KristinaAkalovich/ 'Kristina Akalovich') and [Sergey Artemiev](https://www.alrud.com/people/SergeyArtemiev/ 'Sergey Artemiev'), and Associate [Yuriy Nakul](https://www.alrud.com/people/YuriyNakul/ 'Yuriy Nakul').

On 19 June 2024 an event “ALRUD Summer M&A Talks ‘24” arranged by Corporate and M&A Practice took place at Ararat Park Hotel Moscow. During the event ALRUD Partners [Alexander Zharskiy](https://www.alrud.com/people/AlexanderZharskiy/ 'Alexander Zharskiy'), [Anton Dzhuplin](https://www.alrud.com/people/AntonDzhuplin/ 'Anton Dzhuplin'), [Sergey Khanaev](https://www.alrud.com/people/SergeyKhanaev/ 'Sergey Khanaev'), and a guest speaker Investment banker Pavel Vlasov discussed the latest trends and tendencies in 2023-2024 with reference to the recent M&A transactions and shared the findings of their own research on the terms of M&A transactions successfully completed by ALRUD team over the last 3 years. The speakers also focused on the major aspects and specifics of structuring transactions through closed-end investment funds and investment partnerships, the advantages and intricacies of such structures, and the best practices for the efficient use of these tools. This topic was of great interest to the audience, guests actively asked questions and got involved into discussion. After the content part, the Partner and Head of Practice Alexander Zharskiy summed up the discussion and invited the guests to enjoy the informal networking during the cocktail reception at the outdoor patio “Kremlin” giving a unique view of the Bolshoi Theater and the Red Square. Many thanks to all the guests for participating in the summer event arranged by ALRUD Corporate and M&A Practice and for their positive feedback! 

Under the guidance of [Anton Dzhuplin](https://www.alrud.com/people/AntonDzhuplin/ 'Anton Dzhuplin'), Partner of Corporate and M&A Practice, [Anna Grosheva](https://www.alrud.com/people/AnnaGrosheva/ 'Anna Grosheva'), Senior Associate, and Valeria Schepkina, Junior Associate, prepared an article on: “Option and convertible loan agreements as legal and financial instruments aimed at the protection of the investor’ interests and risk mitigation within venture investing” for the American Bar Association International Law Section publication on “International M&A and Joint Ventures”. This publication, featuring opinion of 27 authors from 14 jurisdictions, summarizes the latest developments in the legislation and fast-moving landscape of mergers, acquisitions, and joint ventures. Authors from Russia prepared the materials for “International M&A and Joint Ventures” in cooperation with authors from Brazil, Chile, China, the Dominican Republic, El Salvador, India, Korea, Nigeria, Poland, Spain, USA, Uruguay, and Vietnam. The full text of the publication in English is available [here](https://www.alrud.ru/upload/ALRUD%20upload/2024/Newsletters/IMAJV_Newsletter_(May_2024).pdf 'here').

[Anton Dzhuplin](https://www.alrud.com/people/AntonDzhuplin/ 'Anton Dzhuplin'), Partner of ALRUD Corporate/M&A practice, according to the results of the year, was re-elected as Vice Chair of the International M&A Joint Venture Committee of the American Bar Association International Law Section. Within the Committee, world leading experts share best practices and update information in the international law. This cooperation raises their professional expertise. This appointment proves Anton Dzhuplin’s successfulness and professionalism. Anton Dzhuplin has already performed his duties as a Vice Chair of the committee. Anton will hold this office until August 2025. *ABA International M&A Joint Venture Committee focuses on legal and practical issues relating to international and comparative merger and acquisition and joint ventures, including efforts to develop greater international harmonization of laws, regional and national approaches to issues relating to mergers and acquisitions and joint ventures, and developments in countries or regions, that are implementing or changing their mergers and acquisitions and joint venture laws.*

Hygienic is a major Russian manufacturer and supplier of personal hygiene products with modern production facilities based in the Moscow Region and an extensive distribution network. ALRUD team leaded by Corporate and M&A Practice Partner [Anton Dzhuplin](https://www.alrud.com/people/AntonDzhuplin/ 'Anton Dzhuplin') with the assistance of Senior Associate [Irina Kuyantseva](https://www.alrud.com/people/IrinaKuyantseva/ 'Irina Kuyantseva') and Associate [Yuriy Nakul](https://www.alrud.com/people/YuriyNakul/ 'Yuriy Nakul'), represented the sellers’ interests during the whole transaction process, including structuring of the transaction, document drafting and closing of the transaction. *“We are definitely proud that we help clients achieve their goals in complex projects with our thorough expertise. Our clients’ interests are the highest value for us,”* Anton Dzhuplin, Partner of ALRUD Corporate and M&A Practice, said in comments about the transaction.

Dear Ladies and Gentlemen, Special economic measures introduced in 2022 due to “unfriendly” actions of certain foreign states against the Russian Federation have been subject to development and clarification during 2023. We have already highlighted some key aspects of 2023 countersanctions regulation in another [newsletter](https://www.alrud.com/publications/65c1fba7fc0e675c2e00be3e/ 'newsletter'), and here we would like to pay more attention to the corporate and some other regulatory issues. 1. Corporate transactions approval procedure As a reminder, the transactions aimed directly or indirectly at disposal of shares/participatory interests in Russian companies, entered into with persons of “unfriendly” foreign states, as well as payments in favor of “unfriendly” participants/shareholders in case of charter capital decrease or liquidation of a Russian company without using a type ‘C’ account (provided that the payment exceeds RUB 10 mln threshold per month) require clearance in accordance with several countersanctions decrees of the Russian President. However, before an application for granting permission for a transaction/operation is passed to the Sub-Commission of the Government Commission for Control over Foreign Investments (the “Sub-Commission”), it must first receive the support of the “industry-specific” federal executive authority in charge of the area of the target activity (the list is limited to eleven ministries) and the Ministry of Finance. The procedure for obtaining approvals from the Sub-Commission has become clearer: the consideration process has become more transparent, and approval criteria have been established that must be met in order to obtain a positive decision. The most crucial and ordinary criteria are obligation to transfer to the federal budget a contribution in amount equal to at least 15% of the market value of the respective assets, as well as payments under the transactions (operations) to foreign accounts (regardless of the account currency) in installments. Please note that the final schedule of payments is established by the Sub-Commission, taking into account the position of the Bank of Russia. 2. Liability for non-compliance As of now, there is no specific liability for conducting transactions/operations in breach of the procedure stipulated by the counter-sanctions decrees (the relevant draft law of the Ministry of Finance introducing special administrative liability has not yet been adopted). However, execution of transactions/operations without the Sub-Commission approval may entail the following consequences: - {{(A)}} Transaction/operation may be held null and void and formally result in mutual restitution under the general civil law provisions (the prosecutors were given the powers to initiate and participate in relevant judicial proceedings); - {{(B)}} Deprivation of direct participants/shareholders of Russian companies from their voting rights; - {{(C)}} Refusal of Russian banks to conduct payments and refusal of registrars/notaries to register the transfer of title to the shares/participatory interests in Russian companies. 3. Interim administration and related risks Decree No. 302 of the Russian President provided for introducing interim management in respect of Russian assets of “unfriendly” companies as a response to the deprivation of Russian persons of the title to the property in “unfriendly” countries, or to a threat to Russian security and defense capability. The interim administration is carried out by Rosimushchestvo/Government of Moscow, that exercises the rights of the owner (except for disposal) and appoints new management bodies. In addition, the interim administration is introduced for an unlimited term and is terminated by a new order of the Russian President. At present, interim administration is carried out in respect of several major companies significantly influencing the Russian economy in respective areas (Unipro, Fortum, Danone, Baltika (Carlsberg), etc.). Introduction of the interim management mechanism and the possibility of it being applied to all foreign assets of “unfriendly” non-residents without any particular criteria creates significant additional risks affecting the activity of foreign companies in Russia. 4. Payment of dividends Payment of dividends to foreign creditors in the amount exceeding RUB 10 mln per calendar month is also restricted. When considering the respective application for making such payment without using a type ‘C’ account, the Sub-Commission pays attention to the number of criteria, especially to the retrospective analysis of payments for the previous periods. In case the company never paid any dividends earlier and accumulated the significant amount of non-distributed moneys, the payment in question may be regarded as siphoning money out of Russia, thus reducing the chances of obtaining the Sub-Commission approval. However, the distribution of dividends to the foreign creditors may be allowed regardless of compliance with the requirements established by the Sub-Commission, providing that the amount of dividends to be paid does not exceed the amount of investments in Russia. Here, investments made by foreign creditors in the Russian economy since April 01, 2023, including the expansion of production in Russia and the development of new technologies, shall be taken into account. In this case, investments are understood to be new investments in Russia (including through loans, construction of factories, and so on). If a Russian subsidiary invests its profits earned in the Russian Federation, then such an investment is considered an ordinary business activity. 5. Financial transactions Restrictions on granting and repaying loans to foreign creditors also continue to apply. In particular, it is prohibited to perform the following operations without a special approval: - foreign currency operations related to providing loans in foreign currency to both “unfriendly” and “friendly” non-residents; - transactions related to granting loans in Rubles to “unfriendly” non-residents; - performing obligations under loans in favor of “unfriendly” non-residents in the amounts exceeding RUB 10 mln per month without using a type ‘C’ account. The regime of type ‘C’ accounts significantly limits the available operations with funds. The allowed operations include, inter alia, transferring of funds to other type ‘C’ accounts, payment of the debtor’s own taxes and duties in Russia, acquisition of federal loan bonds in auctions. Moreover, currently it is not allowed to transfer money from a type ‘C’ account to ordinary accounts, including with an approval of any kind. Please also note that according to the non-public clarifications of the Bank of Russia, performing set-offs under loans or other claims (e.g., payment of dividends) with participation of “unfriendly” non-residents, in case payment under such obligations would be subject to counter-sanctions restrictions (i.e. the amounts are to be paid to a type ‘C’ account), constitutes violation of counter-sanctions restrictions. 6. Liquidation of subsidiaries and branches Currently, it is possible to liquidate companies without any Sub-Commission approval and we dealt with multiple successful cases in our practice. However, according to some notaries, the liquidation itself should also be cleared by the Sub-Commission. In the absence of official clarifications on the necessity for the relevant approval, this issue might be interpreted differently. Distribution of the liquidation proceeds exceeding RUB 10 mln threshold requires clearance with the Sub-Commission. However, it is quite complicated to obtain approval for such operations as it entails the withdrawal of funds abroad without continuing operations in Russia (i.e. there is no positive effect on socio-economic development of Russia).

[Anton Dzhuplin](https://www.alrud.com/people/AntonDzhuplin/ 'Anton Dzhuplin'), Partner of ALRUD [Corporate/M&A practice](https://www.alrud.com/services/CorporateLaw/ 'Corporate/M&A practice') and Co-Head of [Crisis Management, Economic sanctions and Compliance practice](https://www.alrud.com/services/EconomicSanctionsandCompliance/ 'Crisis Management, Economic sanctions and Compliance practice'), was re-elected as Vice Chair for the Year In Review of the International M&A Joint Venture Committee of the American Bar Association International Law Section. Within the Committee, world leading experts specializing in M&A share best practices and update information in the international law, raising their professional expertise. This appointment proves high standards of ALRUD’s Corporate and M&A practice and demonstrates Anton Dzhuplin’s successfulness and professionalism. For many years Anton has been highly involved in professional activities of respectable international associations. Anton Dzhuplin has already performed his duties as a Vice Chair of the committee. Anton will hold this office until August 2024. *ABA International M&A Joint Venture Committee focuses on legal and practical issues relating to international and comparative merger and acquisition and joint ventures, including efforts to develop greater international harmonization of laws, regional and national approaches to issues relating to mergers and acquisitions and joint ventures, and developments in countries or regions, that are implementing or changing their mergers and acquisitions and joint venture laws.*

On 12 July, [Maxim Alekseyev](https://www.alrud.com/people/MaximAlekseyev 'Maxim Alekseyev'), Senior Partner, [Anton Dzhuplin](https://www.alrud.com/people/AntonDzhuplin 'Anton Dzhuplin'), Partner, and [Sergey Milanov](https://www.alrud.com/people/602447b98caff92ddf1339db/ 'Sergey Milanov'), Of Counsel and Co-Head of the firm’s Asia-Pacific Desk, held a seminar for members of the Japan Association for Trade with Russia and the Newly Independent States (ROTOBO) in Tokyo. Our lawyers told the Japanese audience about the business operations of companies from “unfriendly” countries on the Russian market, as well as explained the regulations covering exit transactions involving the sale of shares or stakes in the Russian companies by foreign shareholders. They also shared practical advice on the legal aspects of implementing such transactions. In the seminar, the following topics were covered: - {{1.}} "Current trends and strategies of actions of companies from “unfriendly” countries in the Russian market. What foreign companies that continue to operate in the Russian Federation should keep in mind" (speaker - Maxim Alekseyev). - {{2.}} "Developments in the regulation of transactions involving the sale by foreign shareholders from 'unfriendly' countries of shares or stakes in their Russian companies" (speaker - Anton Dzhuplin). - {{3.}} "A summary of the procedures for the liquidation of a Russian subsidiary and the closing of a Russian branch by a foreign company from an 'unfriendly' jurisdiction'" (speaker - Sergey Milanov). The above topics were followed with a high interest by the audience. 

We are pleased to share with you the following updates related to liquidation of companies. 1. Simplified liquidation procedure
On 07 June 2023 the Russian parliament approved the draft law1 allowing the shareholders of small and medium-size enterprises to liquidate their business within a simplified procedure. Suggested changes: - Timing. The whole liquidation process under the new procedure will take 3 months instead of usual 7-12 months as per the existing liquidation rules; - Liquidation process is expected to be simplified for certain entities. Shareholders will need to sign and submit a single application instead of 3 applications under standard procedure. All other steps (such as notification of liquidation in mass media) will be made by the registration office. Who is eligible? According to the draft law, any legal entities matching all the following criteria simultaneously will be able to apply for the simplified liquidation: - Included in the register of small and medium-size enterprises; - Not paying VAT or exempt from its calculation and payment; - Not in bankruptcy and no signs of bankruptcy from the Russian law perspective; - All payments due to dismissed employees are made in full; - Settlements with creditors are made in full; - No unsettled tax and other state-related obligations; - There are no records2 on non-reliable information about the company in the register; - No real estate or vehicles owned; - Not in already launched standard liquidation reorganization or administrative exclusion from the register. When to expect? According to the draft law, the new provisions shall come into effect starting from 1 July 2023. 2. Counter-sanctions regime impact on standard or simplified liquidation
Decree of the President No. 618 dated Sep-tember 08, 2022 (“Decree 618”) introduced the obligation to get approval of the Government Commission for the control of foreign investment in the Russian Federation (the “Government Commission”) when persons from so-called “unfriendly” states3 (states that introduced or supported sanctions against Russia) or under control of persons from “unfriendly” states cease to own shares in a Russian company. Another decree of the President No. 737 dated 15 October 2022 (“Decree 737”) introduced the obligation to get approval of the Government Commission for distribution of the liquidation proceeds to shareholders in case the sum exceeds 10 million RUB per month. Possibility to launch liquidation without approval of the Government Commission As of today, we see that it is practically possible to launch liquidation without approval of the Government Commission under Decree 618 in case liquidation proceeds do not exceed 10 million RUB (otherwise, approval under Decree 737 is required). We also see that there are different interpretations regarding the necessity to get approval under Decree 618, and we cannot exclude the risk that there may arise certain difficulties with launching the liquidation (due to the position of the Russian notaries and authorities), or that the Russian authorities can issue clarifications stating that the approval under Decree 618 is required in all cases. As of today, though, we have many successful cases when liquidation without approval under Decree 618 was launched with no issues. The main risk we see here is that in the middle of the liquidation the necessity of getting the approval may arise, and in that case it would be necessary to either get the approval or cancel the liquidation. № 164662-8 on amendments to the Federal Law 'On state registration of legal entities and individual entrepreneurs' and article 3 of the Federal Law 'On limited liability companies'. Record made by the registration office meaning that certain information in the register is not actual or is fake/non-reliable. Including USA, European Union Member States, UK, Japan. Please refer to the full list via the below links: [http://static.government.ru/media/files/wj1HD7RqdPSxAmDlaisqG2zugWdz8Vc1.pdf](http://static.government.ru/media/files/wj1HD7RqdPSxAmDlaisqG2zugWdz8Vc1.pdf 'http://static.government.ru/media/files/wj1HD7RqdPSxAmDlaisqG2zugWdz8Vc1.pdf'), and [http://static.government.ru/media/files/0s7FsWoReCQYAOhYkh0iM9U3QJLmHHKo.pdf](http://static.government.ru/media/files/0s7FsWoReCQYAOhYkh0iM9U3QJLmHHKo.pdf 'http://static.government.ru/media/files/0s7FsWoReCQYAOhYkh0iM9U3QJLmHHKo.pdf')